Income inequality and carbon consumption: Evidence from Environmental Engel curves

Abstract

This paper analyses the relationship between the distribution of income and the carbon dioxide content of household consumption. Household carbon is estimated by linking expenditure data to productive sectors and their carbon intensity derived through input-output analysis. Environmental Engel curves (EECs) are estimated, which describe the relationship between household income and CO 2 in the United States between 1996 and 2009. A second-degree polynomial specification in income is found to approximate well the fit of more flexible nonparametric models. These parametric EECs are used to decompose the within-year household carbon inequality as well as the evolution of household carbon over time. In both cases, household income appears to be a main driver of carbon consumption. A potential "equity-pollution dilemma" is described and a method to quantify it is proposed. Assuming (conditional) homogeneity in preferences, EEC estimates predict that progressive income transfers would raise household carbon by 5.1% at the margin and by about 2.3% under complete income redistribution in 2009.

Air pollution, general government public-health expenditures and income inequality: Empirical analysis based on the spatial Durbin model

“…Fig 1 shows the scatter plot of air pollution and income inequality in 156 countries or regions (hereinafter collectively referred to as countries). As shown in Fig 1, there is a clear positive correlation between air pollution and income inequality [20,23]. Although this differs from most previous research conclusions [16,22,24], it provides evidence for the impact of air pollution on income inequality.…”

The Impact of Income Inequality on Carbon Emissions in China: A Household-Level Analysis

“…Golley and Meng (2012), Baek and Gweisah (2013), Jorgenson (2015), Kasuga and Takaya (2017), , and Uzar and Eyuboglu (2019) came to the conclusion that higher CO 2 emissions were positively associated with increasing income inequality [34][35][36][37][38][39]. In contrast, Heerink et al (2001), Coondoo and Dinda (2008), Baloch et al (2017), Hübler (2017), and Sager (2019) held that inequality affected carbon emissions in the opposite direction [28,[40][41][42][43]. Using an unbalanced panel data set from 158 countries, Grunewald et al (2017) found that the impact of income inequality on carbon emissions varied with economic development levels [44].…”

“…Based on these discussions, it is clear that most of the existing literature investigates the effect of income inequality on carbon emissions focused on the national level, state level, or city level; however, few studies concern about the micro behavior body: the households. Based on the United States Consumer Expenditure Survey (CEX) from 1996 to 2009, Sager (2019) estimated the Environmental Engel curves (EECs) and examined the effects of different factors on the evolution of carbon emissions over time [43]. He found that income, age structure, education, family size, race, and region were relevant, and among these factors, income played a major role.…”

Historical evolution of global inequality in carbon emissions and footprints versus redistributive scenarios

“…In this paper we choose to quantify inequality via Lorenz curves. The Lorenz curve has considerable intuitive appeal and is widely used to analyze the evolution of inequality in energy consumption 5/26 (Jacobson et al, 2005;Lawrence et al, 2013) and CO2 emissions (Groot, 2010;Sager, 2019;Zimm and Nakicenovic, 2019). This is due to its graphical depiction of inequality as the divergence of the Lorenz curve from the perfect equality diagonal.…”